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प्रश्न
Why is separate disclosure of cash flows from investing activities important? State.
Why is separate disclosure of cash flow from investing activities important while preparing Cash Flow Statement?
उत्तर १
The cash outflows due to investing activities are huge and used to acquire long-term assets. If not disclosed in a separate manner it will signal a wrong position of cash and cash equivalents.
उत्तर २
The separate disclosure of cash flow from investing activities is important as it helps to show the
inflows and outflows of long-term investments and fixed assets.
APPEARS IN
संबंधित प्रश्न
While preparing the Cash Flow Statement the accountant of Gulfam Ltd., a financing company showed Dividend received on Investments as Investing Activity. Was he correct in doing so? Give reason.
While preparing the Cash Flow Statement of Alka Ltd. 'dividend paid' was shown as an operating
activity by the accountant of the company. Was he correct in doing so? Give reason.
While preparing Cash Flow statement of Sharda Ltd. 'Depreciation provided on fixed assets' was added to net profit to calculate cash flow from operating activities. Was the accountant correct in doing so? Give reason.
The accountant of Manav Ltd. while preparing Cash Flow Statement added depreciation provided on fixed assets to net profit for calculating cash flow from operating activities. Was he correct in doing so? Give reason.
What is meant by 'Cash from Operating Activities'?
Short term investments are not considered while preparing cash flow statement. Why?
From the following Balance Sheet of Vijay Ltd. as on 31-3-2009 and 31-3-2010 prepare a Cash Flow Statement.
|
Liabilities |
31-3-2009 Rs |
31-3-2010 Rs |
Assets |
31-3-2009 Rs |
31-3-2010 Rs |
|
Share Capital |
45,000 |
65,000 |
Fixed Assets |
46,700 |
83,000 |
|
General Reserve |
15,000 |
27,500 |
Stock |
11,000 |
13,000 |
|
Profit and Loss Account |
10,000 |
15,000 |
Debtors |
18,000 |
19,500 |
|
Trade Creditors |
8,700 |
11,000 |
Cash |
2,000 |
2,500 |
|
|
|
|
Preliminary Expenses |
1,000 |
500 |
|
|
78,700 |
1,18,500 |
|
78,700 |
1,18,500 |
|
|
|
|
|
|
|
Additional Information:
(i) Depreciation on Fixed assets for the year 2009-2010 was Rs 14,700
(ii) An interim dividend Rs 7,000 has been paid to the shareholders during the year.
What is the object of preparing a Cash Flow Statements?
The important objectives for preparing Cash Flow Statement are as follows.
- It helps to ascertain the gross inflows and outflows of cash and cash equivalents from various activities.
- Secondly, Cash Flow Statement helps in analysing various reasons responsible for change in the cash balances during an accounting year.
Short Answer Question
What is a Cash Flow Statement?
Long Answer Question
Describe"Indirect" method of ascertaining Cash Flow from Operating Activities.
Which one is Cash Inflows from operating activities?
Which one is Cash Inflows from Financing activities?
Classify the following activity into operating activities, investing activities, financing activities or cash activities.
"Cash Sales"
Classify the following activity into operating activities, investing activities, financing activities or cash activities
"Interest and Dividend received": In case of a financial enterprise (whose main business is lending and borrowing)
Balance Sheet (Extract)
| Liabilities | 30-03-2018 (₹) | 31-03-2017 (₹) |
| Fixed Assets | 23,80,000 | 17,50,000 |
Depreciation on fixed assets was ₹ 2,00,000 for the year. How much amount for 'Purchase of fixed assets' will be shown in investing activity for cash flow statement prepared on 31st March, 2018?
Assertion (A): Buy-back of equity shares comes under financing activities.
Reason (R): Financing activities are the activities that result in a change in the size composition of the owner's capital and borrowing of the enterprise from other sources.
An example of Cash Flows from Operating Activity is ______
In case of financial enterprises, the cash flow resulting from interest and dividend received and interest paid should be classified as cash flow from ______.
Maturity period for a Short-term Investment from the date of its purchase to be considered as cash equivalents should be:
